Moody's says U.S. ports face headwinds

The credit agency Moody's says the U.S. port industry has a negative outlook because container-volume growth will lag behind the historic norm, putting pressure on the industry's biggest customers.
"The negative outlook is driven by the imbalance between supply and demand in the shipping-line industry, which ports rely on for revenue," said Moody's analyst Myra Shankin, author of a new report released on Friday. "Fleets are growing in number and size, but demand isn't keeping pace. This imbalance will put pressure on shipping lines and the rates they pay U.S. ports."
Moody's said container volume is on track to rise 2-3 percent overall in 2014, in line with growth in the U.S. economy, but trailing the 7 percent long-term average.
A growing supply-demand imbalance will continue to pressure shipping lines and the rates they pay ports, Moody's said. Capacity is expected to rise 8 percent in 2014.
Many ports catering to the container trade, particularly those on the East Coast, need to increase capital spending to accommodate larger ships.
The report did not downgrade any specific port authorities, but outlined headwinds facing the industry.